Daily Management Review

Near-Complete Trade Deal In May Could Form Basis For US-China Partial Agreement


Near-Complete Trade Deal In May Could Form Basis For US-China Partial Agreement
The United States and China have now fallen back on the agreement that the two sides almost managed to agree to in May this year for deciding on the amount of tariffs that each should take back as part of the so called phase one trade agreement between the two countries, claimed reports quoting sources with knowledge of the matter.
Linking of the size of tariff rollbacks to the preliminary terms set in that failed May deal is currently being carried out between the trade negotiators of the two countries as both are currently engaged in a tough negotiations in perhaps the final stage of the phase one of the trade agreement between the two largest economies of the world, claimed reports quoting sources. Reports also claimed that the precise percentage of roll back of tariffs is still being debated by the White House. Beijing has demanded that Washington rolls back all tariffs that it had imposed after May this year with immediate effect while the rest of the tariffs be lifted in a phased manner.
According to reports, taking back of the initial tariffs on some $250 billion in Chinese goods that US President Donald Trump imposed last year is being discussed currently between the two countries. However while there were also reports that claimed some of the advisers of Trump are arguing in favor of keeping those tariffs unchanged for the long term so that the US can ensure that China fulfills the promises it has made as part of that trade agreement, those are now also considering some roll back so that the phase one of the trade pact goes through, said reports.
There are some differences of opinion among US officials about how much should be covered in the phase one deal and about how much of the tariffs already in place should be rolled back by the Trump administration, said reports. Sources further were quoted in reports saying that the US officials are currently discussing that around 35 per cent of the total trade be included in the phase one of the deal as is being proposed by US Trade Representative Robert Lighthizer while Trump himself has reportedly stated that 60 per cent of the trade be included in the deal.
Following agreement on this issue by both the countries, there are two options available to the two sides - the first is to lower tariffs as agreed by both Washington and Beijing or eliminated according to the percentage of trade to included in the phase one deal.
There were no comments on the issue available in the media from the spokesmen for Lighthizer and the White House.
According to analysts, significantly less than what Trump has been promising publicly is set to be covered under the first phase of the deal because most of the highly contentious issues between the two countries will remain unresolved. Further, there are many analysts who also say that it is likely possible that the two countries never come to an agreement on the rest of the deal that requires making structural reforms in the economies – especially that of China.